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use excel / excel formula to answer the folowing LO4 28. NPV Valuation The Yurdone Corporation wants to set up a private cemetery business. According
use excel / excel formula to answer the folowing
LO4 28. NPV Valuation The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep. business is looking up." As a result, the cemetery project will provide a net cash inflow of $164,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 4.7 percent per year forever. The project requires an initial investment of $1.825,000 a. If the company requires a return of 12 percent on such undertakings, should the cemetery business be started? b. The company is somewhat unsure about the assumption of a 4.7 percent growth rate in its cash flows. At what constant growth rate would the company just break even if it still required a return of 12 percent on its investment? LO4, LO6 17. NPV and Profitability Index Coore Manufacturing has the following two possible projects. The required return is 12 percent Year Project Y Project Z 0 -$47,600 -$81,000 1 23.900 34,000 2 18,600 3 20,700 14,600 32.800 30,500 27.300 4 a. What is the profitability index for each project? b. What is the NPV for each project? c. Which, if either, of the projects should the company accept Step by Step Solution
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